Embattled power utility Eskom is quickly becoming the battleground between three opposing forces, cementing troubles that various analysts and economists warned would happen when President Cyril Ramaphosa appointed a third minister to get involved in the company’s affairs.

Speaking to the Mail & Guardian, government insiders say that the newest entrant into the Eskom arena, electricity minister Kgosientsho Ramokgopa, had a tough time at a cabinet meeting this week, butting heads with seasoned gladiators, mineral resources and energy minister Gwede Mantashe and public enterprises minister Pravin Gordhan.

The tensions were reportedly over Ramokgopa’s proposal to extend the life of South Africa’s coal fleets and to delay the decommissioning of stations in a bid to boost energy generation.

The plan has received backing from the ANC’s national working committee (NWC), but needs fractious departments to work together to execute it. As yet, Ramokgopa’s executive powers are not clearly defined, and so he is reliant on both the DMRE and DPE to fulfil his mandate of ending load shedding.

According to the Mail & Guardian, this did not go well, with both Mantashe and Gordhan dismissively telling the electricity minister to take the proposal to the National Energy Crisis Committee (Necom).

Mantashe is in charge of the energy portfolio in general and has control over mining, coal and diesel policy, which is vital to Eskom’s operations. He also manages procurement, including emergency procurement.

Gordhan, meanwhile, is in charge of select state companies, including Eskom, and oversees the operational and administrative processes of these groups as well as serving as the government’s representative on their boards.

At present, nothing can be done to make changes at Eskom without both of these ministers involved.

Who controls what?

Even before Ramokgopa’s appointment, Eskom has struggled to operate efficiently, reporting to two different departments. And tensions between these departments and its ‘ownership’ of Eskom have always persisted.

Ramaphosa announced in March, following Ramokgopa’s appointment, that the long-term plan for Eskom and other state companies is that they would no longer operate under the DPE, but rather move to their relevant portfolios. In lieu of a department, the government would establish a new ‘single entity’ to have line of sight over state companies.

Ostensibly, this means that companies like SAA would move to the Department of Transport, Denel to the Department of Defence, and Eskom to the Department of Mineral Resources and Energy.

Earlier this month, Ramaphosa was reportedly gearing up to move some of the procurement powers from the DMRE to the new electricity minister. This prompted Mantashe to ‘dare’ the president to fire him instead.

According to sources speaking to News24, Ramaphosa backed down, leaving questions over exactly what powers the electricity minister actually has relating to Eskom.

Addressing an ANC conference earlier in the year, Mantashe alluded to plans underway to split the DMRE into two departments – one for energy and one for mineral resources – pushing tensions up further.

Critics have flagged many issues with having Eskom under the DMRE, particularly with policy conflicts and conflicts of interest.

For example, Eskom is heavily reliant on diesel to run its open-cycle gas turbines. To mitigate the costs of paying high prices for diesel, the group – under former Eskom CEO Andre de Ruyter – wanted to acquire a wholesaler licence so it could get cheaper prices. These licences are controlled by the DMRE.

If the DMRE granted Eskom the licence, it would not use another DMRE-controlled company, PetroSA, for its diesel, thus impacting revenue and the DMRE’s performance.

Mantashe has also been accused of having vested interests in coal – one of the key resources used by Eskom.

Government was warned

Economists, analysts, opposition parties, business interest groups and civil action groups all warned that these tensions were bound to flare up.

Ahead of Ramokgopa’s appointment, and even after he was announced as the new minister, stakeholders urged the government not to let wires get crossed – cautioning that a turnaround in South Africa’s power situation would be slowed down if Eskom had too many people to answer to.

Following the electricity minister’s whirlwind tour of all the coal power stations over the past month, and the subsequent plan that emerged from it, these same commentators were not surprised by its incoherence with existing policy and subsequent lack of support from colleagues.

The Bureau for Economic Research said that it is evident that the three ministers in charge with Eskom are ‘not signing from the same sheet’.

Intellidex analyst Peter Attard Montalto said that Ramokgopa’s proposals are wholly removed from the reality of how the government works, and public statements from Treasury, in particular, have left the minister with egg on his face. Nedbank economist Johannes Khosa said that despite having three ministers working on the energy crisis at Eskom, the situation has not improved, and is unlikely to get better any time soon. – businesstech.co.za